We then developed a methodology for our client to quantify cost improvements and monitor ongoing results. The monitoring system included operational Key Performance Indicators (KPIs) and targets to track cost reductions results, performance dashboards and regular meeting reports.
Promoting a new and sustainable way of managing cost
The Lasource Group worked with each business unit to point out areas of improvement particular to each asset, challenge operating practices, and work with each of the assets to develop a realistic implementation plan to reduce costs.
The LaSource Group’s efforts helped the client reduce soft dollar costs 65% across the five business units. We also helped to establish a cost-conscious culture. Our client is now rolling the program out more broadly.
Improving the bottom line
We worked with asset leadership to identify and implement cost savings. Through a heavily data-driven exercise, we benchmarked costs across the business units, identifying potential opportunities for efficiency improvement. We challenged aspects of their current operating approaches and agreed priority areas for cost reduction.
For each agreed area, we evaluated associated risks and feasibility of identified cost reduction opportunities. We went on to develop detailed, formalized action plans to bring about cost reduction/elimination.
The LaSource Group identified three broad categories for the opportunities that had relative ease of implementation to deliver cost reductions:
1. Automated Credit Scoring Model to reduce time spent on analyzing small dollar applications for credit.
2. Accounts Receivable Portfolio Segmentation to identify high risk accounts.
3. Implemented a soft call collection program for past due accounts.
Once specific opportunities were agreed, we focused our efforts on developing improved planning and supporting cross-functional collaboration to bring about optimization of activities and encourage a different way of thinking about cost management across each business unit.